Hong Kong home prices may be coming down, but the city still ranks tops for the world’s most expensive office space, according to a report released today by property consultancy JLL.
Renting prime space in Hong Kong now costs an average of $262 per square foot per year, according to JLL’s research, outpacing runner-up London where top-notch space can be had for just $240 per square foot per year.
And Hong Kong was not the only Asian city to feature high office rental rates, with Beijing finishing ahead of New York with the world’s third most expensive offices and Shanghai placing fifth.
Mainland in a Slump? Not If You Own an Office Building
While China’s stocks have been riding a roller coaster – falling more than 6.3 percent in trading today alone – it’s office rents seem to be holding up well. At least in the largest cities, where the country’s growing service sector is helping to fill record amounts of new office space.
Prime space in Beijing is now leasing for $199 per square foot per year, according to JLL – outpacing America’s most expensive city, New York ($171 per square foot per year) by more than 11 percent. While Shanghai was slightly cheaper than New York at $136 per square foot per year, it still outranked longer-established centres such as Sydney, Tokyo and Singapore.
Asia’s Fast Growth Leads to Pricier Offices
According to JLL, the rapid growth of Asian economies has driven office rental rates in several cities in the region to the top of the charts.
“Our research reveals that three of the top five cities with the costliest office rents are in Asia and half of the top 10 are Asian cities,” said Chris Archibold, head of markets at JLL Singapore. “A large part of the global growth is now driven out of Asia and international businesses will continue to be keen to set up their presence in the region; some of these markets have a shortage of supply driving rents northwards.”
However, even within the Asia Pacific region there are some (relative) bargains. Singapore, which has seen a surge of new supply ranked 11th globally, and Sydney, where housing prices have gone through the roof, has only the 20th most expensive offices out of the 24 cities surveyed with office rental rates of just $60 per square foot per year.
Tokyo and Delhi, however, both ranked in the top 10.
In the JLL Global Premium Office Rent Tracker survey the property consultancy compared office prices in 24 cities around the world, including the key elements of occupancy costs – net effective rent, service charges and property tax.